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Fixed Rate Mortgage Uk - Fixed Rate Mortgages in the UK - Finding a Fixed Rate Mortgage in the UK, UK Mortgage Rates

Basic Information

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When looking for a new home or property, you will more than likely need to find a mortgage. While in the US, most are now looking for 30 year fixed rate mortgages, the situation is somewhat different in the UK, where fixed rate mortgages are not as common and typically have much shorter terms than they do in the US. Most fixed rate mortgages in the UK have a 1, 2, 3, or 5 year term, after which it is common to have a variable rate. Therefore, unlike the US, mortgage rates in the US are more fluid, and most buyers will have to refinance their mortgages several times throughout the life of their loans.

Finding a Fixed Rate Mortgage in the UK

Before beginning the process of shopping for a fixed rate mortgage, then you need to establish how much you can afford to put down on a property and how much you can afford to pay every month. This will help you get a general sense of what kind of mortgage you will be able to take on. In most cases, it is best to have a reserve of 15% to 25% to put down on a property in the UK. Fixed rate mortgages, therefore, for a £200,000 property, may require about £30,000 to £50,000 in cash reserves to put down on the property.

When you are beginning to shop for a fixed rate mortgage, take the time to shop around. While sites like Mortgages.co.uk are typically a good starting point. However, you will probably also need to make phone calls directly to lenders and probably will need to visit banks. Also, your estate agent will be able to provide you with many of your mortgage options.

You also need to consider the type of property that you are going to buy. Often, standard lenders will not provide a loan for a risky property such as a very old house or a house that needs a lot of work. Some lenders also have different rates for different types of properties. While it is best to get pre-approved for a mortgage rate and amount based on your income and down-payment, you also need to be clear about the policies of your lender with respect to different types of property.

Once you have a basic understanding of what you can afford and the types of mortgages that are available to you, then you will be able to start shopping for mortgages.

UK Mortgage Rates

Base interest rates (which are the interest rates before any fees or additional charges are added) in the UK have, like in the US, dropped substantially since the 1990s. In 1990, the base interest rate was around 15%. This dropped below 6% in 1996 and hovered between 6% and 4% until 2008, when rates dropped to around 2.5%, where they have remained.

For most 2 to 5 year fixed rate mortgages in the UK, the average rate in August 2010 is between 2% and 3%.

Fixed Rate Mortage - Why You Should Get a Fixed Rate Mortgage [next] [back] Fixed Mortgage Interest Rate - Fixed Mortgage Interest Rate - Mortgage Rates History and Patterns, Finding the Best Fixed Interest Rate Mortgage - Options and Rates

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